Iceland's Blockchain Landscape

Iceland has become very attractive for blockchain operators, mainly because of the abundance of energy at favourable rates. Electricity is very important for the blockchain, as the computers consume an excessive amount of power during operation. They also heat up during the process and the naturally cold climate in Iceland also contributes to this. Blockchain is an activity aimed at mining cryptocurrencies. These favourable conditions for blockchain in Iceland have led to business booming here. Interestingly, the use of Bitcoin is prohibited in Iceland.

Highly Dependent on Bitcoin Prices

Bitcoin is the most popular cryptocurrency, even though others are traded on virtual exchanges. Bitcoin prices fluctuate wildly on exchanges and blockchain players are heavily dependent on the price of Bitcoin. They spend hours mining the cryptocurrency and once they have the currency, they can trade it and make money. Mining the cryptocurrency requires them to invest heavily in powerful computers. Dealing with the blockchain in Iceland would mean less cost for electricity consumption. However, there are costs involved and after all, making profits is one of the main goals of any business.

High Power Use Can Come Back to Hit the Business

It is known that the blockchain in Iceland consumes a lot of electricity. This has been confirmed by various reports. A report by KPMG states that 90 of the electricity used by data centres in Iceland is consumed by cryptocurrency mining companies. Another piece of information comes from one of the largest electricity producers in Iceland, HS Orka. The company claims that the amount of electricity consumed by blockchain units in the country exceeds the amount used to heat all Icelandic homes. This kind of imbalance may cause the government to become alarmed and raise electricity tariffs for blockchain operations to a much higher level than is currently charged. This may have a negative impact on the industry and some may think of winding down the units.

The Icelandic Blockchain Foundation

Proponents of blockchain technology in the country have set up their own organisation, the Icelandic Blockchain Foundation. The aim of this organisation is to inform people about the positive impact that blockchain technology and cryptocurrencies can have on the country’s economy. It has set itself the task of educating people about the blockchain. It has created or collected educational videos that can be used to inform interested parties about how blockchain works. The videos contain details about the various cryptocurrencies. The foundation has also formed internal groups that deal with issues such as cryptocurrency legislation and liaise with the government.

The Future of Blockchain

The future of blockchain in Iceland depends largely on the way Bitcoin is traded and the benefits that mining the currency can bring to the country. Iceland has banned the use of Bitcoin as a tradable currency in Iceland. The government wants to protect gullible citizens from falling victim to the lure of easy money. Many people in many countries have lost their fortunes trading cryptocurrencies in the past.

Those who mine cryptocurrencies via the blockchain can store their currencies and trade them online on virtual exchanges. They can then convert them into ISK and receive funds in their bank accounts.

Blockchain technology is not only used for mining cryptocurrencies, but also in other areas. If Icelandic companies can diversify into these areas and reduce their dependence on cryptocurrencies, there can be a brighter future for them. No one is able to predict the future of cryptocurrencies. The negative thing about them is that they are not backed by a solid asset. A currency like the dollar is backed by a stock of gold.

For any assistance in Iceland contact Swapp Agency.